1_Define - Understanding Six Sigma

Define PhaseUnderstanding Six

Sigma

Define PhaseUnderstanding Six

Sigma

© Open Source Six Sigma, LLCLSS Black Belt v11.1 MT - Define Phase 2

What is Six Sigma?

DefinitionsDefinitions

HistoryHistory

StrategyStrategy

Problem SolvingProblem Solving

Roles & ResponsibilitiesRoles & Responsibilities

Six Sigma Fundamentals

Selecting Projects

Elements of Waste

Wrap Up & Action Items

Understanding Six Sigma


What is Six Sigma…as a Symbol?

σ, sigma, is a letter of the Greek alphabet.– Mathematicians use this symbol to signify Standard Deviation, an

important measure of variation.– Variation designates the distribution or spread about the average of

any process.

The variation in a process refers to how tightly the various outcomes are clustered around the average. No process will produce the EXACT same

output each time.

Wide VariationWide VariationNarrow VariationNarrow Variation


What is Six Sigma…as a Value?

Sigma is a measure of deviation. The mathematical calculation for the Standard Deviation of a population is:

Sigma can be used interchangeably with the statistical term Standard Deviation.

Standard Deviation is the average distance of data points away from the Mean in a distribution.

By definition the Standard Deviation is the distance between the Mean and the point of inflection on the Normal curve.

PointofInflection


The probability of creating a defect can be

estimated and translated into a “Sigma” level.

What is Six Sigma…as a Measure?

*LSL–LowerSpecLimit*USL–UpperSpecLimit

The higher the sigma level the better the performance. Six Sigma refers to a process having 6 Standard Deviations between the average of the process center and the closest specification

limit or service level.

+6-1-3-4-5-6 -2 +4+3+2+1 +5


Measure

“Sigma Level” is:– A statistic used to describe the performance of a

process relative to the specification limits– The number of Standard Deviations from the Mean to

the closest specification limit of the process

The likelihood of a defect decreases as the number of Standard Deviations that can be fit between the Mean and the nearest spec

limit increases.

USL

6 Sigma

5 Sigma

4 Sigma

3 Sigma

2 Sigma

1 Sigma


What is Six Sigma…as a Metric?

Each of these metrics serves a different purpose and may be used at different levels in the organization to express the performance of a process in meeting the organization’s or customer’s requirements.

• Defects• Defects per unit (DPU)• Parts per million (PPM)• Defects per million

opportunities (DPMO)• Rolled Throughput Yield

(RTY)• First Time Yield (FTY)• Sigma (s)

These metrics are used in Six Sigma. You will learn more about them through the course of

your study.

8

10

12

14

16

18

20

0 20 40 60 80 100


What is Six Sigma…as a Benchmark?

Source: Journal for Quality and Participation, Strategy and Planning Analysis

Yield

99.9997%

99.976%

99.4%

93%

65%

50%

PPMO

3.4

233

6,210

66,807

308,537

500,000

World Class Benchmarks

10% GAP

Industry Average

10% GAP

Non Competitive

COPQ

<10%

10-15%

15-20%

20-30%

30-40%

>40%

Sigma

6

5

4

3

2

1

What does 20 - 40% of Sales represent to your Organization?


What is Six Sigma…as a Method?

Define - the business opportunity

Measure - the process current

state

Analyze - determine Root Cause

or Y= f (x)

Improve - eliminate waste and

variation

Control - sustain the results

DMAIC provides the method for applying the Six Sigma philosophy in order to improve

processes.


What is Six Sigma…as a Tool?

Six Sigma contains a broad set of tools interwoven in a business problem-solving methodology. Six Sigma tools are used to scope and choose projects, design new products and processes, improve current processes, decrease downtime and improve customer response time.

Six Sigma has not created new tools, it has simply organized a variety of existing tools to create flow.

Customer ValueResponsiveness,

Cost, Quality,Delivery

Management Product Process Process System Functional EBIT, (Enabler) , Design , Yield , Speed , Uptime , Support=


What is Six Sigma…as a Goal?

Sweet Fruit Design for Six Sigma

Bulk of FruitProcess Characterization and Optimization

Low Hanging FruitBasic Tools of Problem Solving

Ground FruitSimplify and Standardize

1 - 2 Sigma

3 Sigma

3 - 5 Sigma

5+ Sigma


What is Six Sigma…as a Philosophy?

Honeywell: Six Sigma refers to our overall strategy to improve growth and productivity as well as a measurement of quality. As a strategy, Six Sigma is a way for us to achieve performance breakthroughs. It applies to every function in our company, not just those on the factory floor. That means Marketing, Finance, Product Development, Business Services, Engineering and all the other functions in our businesses are included.

Lockheed Martin: We have just begun to scratch the surface with the cost-saving initiative called Six Sigma and already we have generated $64 million in savings with just the first 40 projects. Six Sigma uses data gathering and statistical analysis to pinpoint sources of error in the organization or products and determines precise ways to reduce the error.

General Electric: First what it is not. It is not a secret society, a slogan or a cliché. Six Sigma is a highly disciplined process that helps us focus on developing and delivering near-perfect products and services. The central idea behind Six Sigma is that if you can measure how many "defects" you have in a process, you can systematically figure out how to eliminate them and get as close to "zero defects" as possible. Six Sigma has changed the DNA of GE — it is now the way we work — in everything we do and in every product we design.


History of Six Sigma

• 1984 Bob Galvin of Motorola edicted the first objectives of Six Sigma

– 10x levels of improvement in service and quality by 1989

– 100x improvement by 1991

– Six Sigma capability by 1992

– Bill Smith, an engineer from Motorola, is the person credited as the father of Six Sigma

• 1984 Texas Instruments and ABB Work closely with Motorola to further develop Six Sigma

• 1994 Application experts leave Motorola

• 1995 AlliedSignal begins Six Sigma initiative as directed by Larry Bossidy

– Captured the interest of Wall Street

• 1995 General Electric, led by Jack Welch, began the most widespread undertaking of Six Sigma even attempted

• 1997 To present Six Sigma spans industries worldwide



• Simplistically Six Sigma was a program initiated around targeting a process Mean (average) six Standard Deviations away from the closest specification limit.

• By using the process Standard Deviation to determine the location of the Mean the results could be predicted at 3.4 defects per million by the use of statistics.

• There is an allowance for the process Mean to shift 1.5 Standard Deviations. This number is another academic and esoteric controversial issue not worth debating. We will get into a discussion of this number later in the course.



• Six Sigma created a realistic and quantifiable goal in terms of its target of 3.4 defects per million operations. It was also accompanied by a methodology to attain that goal.

• That methodology was a problem solving strategy made up of four steps: measure, analyze, improve and control.

• When GE launched Six Sigma they improved the methodology to include the Define Phase.

ControlImprove

Analyze

Measure

Define

MOTOROLAGENERAL ELECTRIC


DMAIC Phases Roadmap

Identify Problem Area

Ch

am

pio

n/

Pro

cess

Ow

ner

Defi

ne

Measu

reA

naly

zeIm

pro

ve

Con

trol

Assess Stability, Capability and Measurement Systems

Identify and Prioritize All X’s

Prove/Disprove Impact X’s Have on Problem

Identify, Prioritize, Select Solutions Control or Eliminate X’s Causing Problems

Implement Solutions to Control or Eliminate X’s Causing Problems

Implement Control Plan to Ensure Problem Does Not Return

Verify Financial Impact

Determine Appropriate Project Focus

Estimate COPQ

Charter Project


Define Phase Deployment

Business CaseSelected

Notify Belts and Stakeholders

Create High-Level Process Map

Determine Appropriate Project Focus(Pareto, Project Desirability)

Define & Charter Project(Problem Statement, Objective, Primary Metric, Secondary Metric)

Estimate COPQ

Recommend Project Focus

Create Team

Charter Team

Ready for Measure

ApprovedProject Focus

N

Y


Define Phase Deliverables

Listed here are the type of Define Phase deliverables that will be reviewed by this course.

By the end of this course you should understand what would be necessary to provide these deliverables in a presentation.

– Charter Benefits Analysis– Team Members (Team Meeting Attendance)– Process Map – high level– Primary Metric– Secondary Metric(s)– Lean Opportunities– Stakeholder Analysis– Project Plan– Issues and Barriers


Six Sigma Strategy

Six Sigma places the emphasis on the Process– Using a structured, data driven approach centered

on the customer Six Sigma can resolve business problems where they are rooted, for example:

• Month end reports • Capital expenditure approval• New hire recruiting

Six Sigma is a Breakthrough Strategy – Widening the scope of the definition of quality

• Includes the value and the utility of the product/service to both the company and the customer

Success of Six Sigma depends on the extent of transformation achieved in each

of these levels.


Conventional Strategy

Conventional definitions of quality focused on conformance to standards.

Conventional strategy was to create a product or service that met certain specifications.

• Assumed if products and services were of good quality then their performance standards were correct.

• Rework was required to ensure final quality.

• Efforts were overlooked and unquantified (time, money, equipment usage, etc).

Requirementor

LSL

Requirementor

USL

Bad Bad

Target

Good


Problem Solving Strategy

The Problem Solving Methodology focuses on:• Understanding the relationship between independent

variables and the dependent variable.• Identifying the vital few independent variables that effect the

dependent variable.• Optimizing the independent variables so as to control our

dependent variable(s).• Monitoring the optimized independent variable(s).

There are many examples to describe dependent and independent relationships.• We describe this concept in terms of the equation:

• Often referred to as a transfer function

Y=f (Xi)Y=f (Xi)This simply states that Y is a function

of the X’s. In other words Y is dictated by the X’s.


Example

If we are so good at the X’s why are we constantly testing and

inspecting the Y?

Which process variables (causes) have critical impact on the output (effect)?

Y = f (Xi)Y = f (Xi)

CrusherYield

TimetoClose

=f ( )

=f ( )Xn

TrialBalance

CorrectAccountsApplied

SubAccounts

CreditMemos

EntryMistakes, , , , ,

FeedMaterialType

ToolWear Lubricant, , , ,Speed


Y = f(X) Exercise

Exercise: Consider establishing a Y = f(X) equation for a simple everyday activity such as producing a cup of espresso. In this case our output, or Y, is espresso.

Espresso =f ( )X1 , , , ,X2 X3 X4Xn


Six Sigma Strategy

(X1)

(X7)

(X6)

(X5)(X3)

(X2)

(X4)

(X8)

(X10)

(X9)

We use a variety of Six Sigma tools to help separate the “vital few” variables effecting our Y from the “trivial many”.

Some processes contain many, many variables. However, our Y is not effected equally by all of them.

By focusing on the vital few we instantly gain leverage.Archimedes said: “ Give me a lever big enough and a

fulcrum on which to place it and I shall move the world.”Archimedes said: “ Give me a lever big enough and a fulcrum on which to place it and I shall move the world.”

Archimedes not shown actual size!


Breakthrough Strategy

By utilizing the DMAIC problem solving methodology to identify and optimize the vital few variables we will realize sustainable breakthrough performance as opposed to incremental improvements or, even worse, temporary and non-sustainable improvement.

Old Standard

New StandardPerf

orm

an

ce

Bad

Good

Time

6-SigmaBreakthrough

6-SigmaBreakthrough UCLUCL

LCLLCL

UCLUCL

LCLLCL

Juran’s Quality Handbook by Joseph Juran


VOC, VOB, VOE

The foundation of Six Sigma requires focus on the Voices of the Customer, the Business and the Employee providing:

– Awareness of the needs that are Critical to the Quality (CTQ) of our products and services

– Identification of the gaps between “what is” and “what should be”

– Identification of the process defects that contribute to the “gap”

– Knowledge of which processes are “most broken”

– Enlightenment as to the unacceptable Costs of Poor Quality (COPQ)

VOC is Customer Driven

VOB is Profit Driven

VOE is Process Driven


Six Sigma Roles and Responsibilities

There are many roles and responsibilities for successful implementation of Six Sigma.

Eventually there should be a big base of support internal to the

organization.

Yellow Belts

Green Belts

Black Belts

MBB • Executive Leadership

• Champion/Process

Owner

• Master Black Belt

• Black Belt

• Green Belt

• Yellow Belt


Executive Leadership

• Makes decision to implement the Six Sigma initiative and develops accountability methods

• Sets meaningful goals and objectives for the corporation

• Sets performance expectations for the corporation

• Ensures continuous improvement in the process

• Eliminates barriers and recognizes achievement

Not all Six Sigma deployments are driven from the top by Executive Leadership. The data is clear,

however, that those deployments driven by executive management are much more successful

than those that are not.


Champion/Process Owner

• Own project selection, execution control, implementation and realization of gains

• Own Project selection

• Obtain needed project resources and eliminate roadblocks

• Participate in all project reviews

• Ask good questions…

• One to three hours per week commitment

Champions identify and select the most meaningful projects to work on, they provide guidance to the Six Sigma belt and open the

doors for the belts to apply the process improvement technologies.


Master Black Belt

MBB should be well versed with all aspects of Six Sigma, from technical applications to Project Management. MBBs need to have the ability to

influence change and motivate others.

• Provide advice and counsel to Executive Staff

• Provide training and support– In class training – On site mentoring

• Develop sustainability for the business

• Facilitate cultural change


Black Belt

• Project team leader

• Facilitates DMAIC teams in applying Six Sigma methods to solve problems

• Works cross-functionally

• Contributes to the accomplishment of organizational goals

• Provides technical support to improvement efforts

Black Belts are application experts and work projects within the business. They should be well versed with the Lean Six Sigma Technologies and

have the ability to drive results.


Green Belt

• Well versed in the definition & measurement of critical processes

– Creating Process Control Systems

• Typically works project in existing functional area

• Involved in identifying improvement opportunities

• Involved in continuous improvement efforts– Applying basic tools and PDCA

• Team members on DMAIC teams – Supporting projects with process knowledge & data collection

Green Belts are practitioners of Six Sigma Methodology and typically work within their functional areas or support larger Black Belt

Projects.


Yellow Belt

• Provide support to Black Belts and Green Belts as needed

• May be team members on DMAIC teams– Supporting projects with process knowledge and

data collection

Yellow Belts apply the Six Sigma Methodology to their own work responsibilities and serve on

project teams.


The Life of a Six Sigma Belt

Training as a Six Sigma Belt can be one of the most rewarding undertakings of

your career and one of the most difficult.

• You can expect to experience:

– Hard work (becoming a Lean Six Sigma Belt is not easy)

– Long hours of training

– Be a change agent for your organization

– Work effectively as a team leader

– Prepare and present reports on progress

– Receive mentoring from your Master Black Belt

– Perform mentoring for your team members

– ACHIEVE RESULTS!

You’re going places!


Black & Green Belt Certification

To achieve certification Belts typically must:

• Complete all course work:– Be familiar with tools and their application– Practice using tools in theoretical situations– Discuss how tools will apply to actual projects

• Demonstrate application of learning to training project:– Use the tools to effect a financially measurable and

significant business impact through their projects– Show ability to use tools beyond the training environment

• Must complete two projects within one year from beginning of training

• Achieve results and make a difference

• Submit a final report which documents tool understanding and application as well as process changes and financial impact for each project


Organizational Behaviors

All players in the Six Sigma process must be willing to step up and act according to the Six Sigma set of behaviors.

– Leadership by example: “walk the talk”

– Encourage and reward individual initiative

– Align incentive systems to support desired behaviors

– Eliminate functional barriers

– Embrace “systems” thinking

– Balance standardization with flexibility


Summary

At this point you should be able to:

• Describe the objectives of Six Sigma

• Describe the relationship between variation and sigma value

• Recognize some Six Sigma concepts

• Recognize the Six Sigma implementation model

• Describe the general roles and responsibilities in Six Sigma

1_Define - Understanding Six Sigma

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